US manufacturing expands for 3rd month

US manufacturing activity has risen for the third month in a row in August to the highest point of 2013, a monthly industry survey shows.

The Institute for Supply Management (ISM) says its purchasing managers index for the manufacturing sector climbed to 55.7 in August from 55.4 per cent in July. The July index had jumped from 50.9 in June.

The increase in the August PMI reading surprised analysts who had forecast on average the index would drop to 53.6.

"This is a big surprise to us, given the powerful seasonal adjustment forces acting to push the number down this month after the July jump," said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

"The big driver this month is a second straight leap in orders, to a 28-month high of 63.2," he said.

The index for new orders jumped 4.9 percentage points from July to 63.2, the highest level since April 2011.